OPERATIONS MANAGEMENT CUSTOM ACCESS
OPERATIONS MANAGEMENT CUSTOM ACCESS
11th Edition
ISBN: 9780135622438
Author: KRAJEWSKI
Publisher: PEARSON EDUCATION (COLLEGE)
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Chapter C, Problem 9P
Summary Introduction

Interpretation: The ordering policy that could be recommended.

Concept Introduction: Ordering optimum size (creating no additional or shortage of materials in stock) at minimum ordering cost is EOQ.

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As inventory manager, you must decide on the order quantity for an item that has an annual demand of 2,000 units. Placing an order costs you $20 each time. Your annual holding cost, expressed as a percentage of average inventory value, is 20 percent. Your supplier has provided the following price schedule:Minimum Order Quantity            Price per Unit1                                                      $2.50200                                                  $2.40300                                                 $2.251,000                                               $2.00What ordering policy do you recommend?
B). As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 679 units. Ordering costs are $7 each time an order is placed, and the holding cost is 10% of the unit cost. Your supplier provided the following price schedule.   Quantity Price per Unit 1 - 100 $5.65 101 - 350 $4.95 351 or more $4.55   What ordering-quantity policy do you recommend?
University Book Store purchases women's polo shirts from a supplier according to the pricing schedule below. The store sells 500,000 shirts each year. The annual cost of maintaining shirts is 25% and the ordering cost is $40. Quantity per order unit price1- 2499 $ 352500 or more $ 32 The lowest annual acquisition cost for the Bookstore quantity is?
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